Republican powerbroker Cellini indicted by feds as part of corruption investigation

Friday

Oct 31, 2008 at 12:01 AMOct 31, 2008 at 9:39 PM

A federal grand jury Thursday indicted Bill Cellini, longtime Springfield-area political fundraiser and a key player in Sangamon County and state politics for decades, on charges of conspiracy and extortion.

Bernard Schoenburg

A federal grand jury Thursday indicted Bill Cellini, longtime Springfield-area political fundraiser and a key player in Sangamon County and state politics for decades, on charges of conspiracy and extortion.

In a strongly worded response, Cellini’s lawyer said he is “completely innocent of these charges.”

Cellini, who turns 74 next week, is the 13th defendant charged as part of the Operation Board Games investigation, an ongoing federal probe of insider-dealing, influence-peddling and kickbacks primarily involving the Illinois Teachers’ Retirement System and the Illinois Health Facilities Planning Board.

Cellini is charged with one count each of conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe. He will be arraigned later.

In a news release, Chicago-based U.S. Attorney Patrick Fitzgerald said the indictment accuses Cellini of conspiring with two Chicago businessmen and others to shake down an investment firm that was seeking a $220 million allocation from TRS.

Cellini lawyer Dan Webb — who once had the job now occupied by Fitzgerald — responded that the indictment merely rehashes allegations already aired at the trial of Antoin “Tony” Rezko, allegations of which Rezko was found innocent.

Rezko was convicted of 16 counts last spring, but found not guilty of eight other charges, including those that most directly involved Cellini.

‘Absolutely nothing wrong’

Cellini “will fight this case because he has done absolutely nothing wrong,” Webb said in a news release.

“Bill has lived an exemplary life as a successful businessman and devoted husband and father, and he will not allow his reputation to be damaged by these unfair and unjust charges. Bill is confident that a jury will find him not guilty.”

In the situation described in the indictment of Cellini, Webb said, “The Rezko jury returned a not guilty verdict because the allegations were not supported by any credible evidence.”

The indictment says Cellini had longstanding influence with TRS trustees and staff members and was associated with Commonwealth Realty Advisors Inc., a real estate asset firm that managed hundreds of millions of dollars on behalf of TRS. He also raised “significant funds” for a “Public Official A” — believed to be Gov. Rod Blagojevich — and others, the government said.

The charges against Cellini involve “essentially conspiring with others to force Capri Capital, another real estate investment firm, and Thomas Rosenberg, a principal and part owner of Capri, to raise or donate substantial political contributions for Public Official A.”

Rosenberg also is the Oscar-winning producer of the movie “Million Dollar Baby.”

Stuart Levine, a member of both TRS and the Health Facilities Board who pleaded guilty to corruption charges, testified at Rezko’s trial that Rezko had personally approved plans to squeeze Rosenberg and his firm in return for either a $2 million kickback or a $1.5 million campaign contribution to Blagojevich.

According to the Cellini indictment, in the spring of 2003, Cellini and Levine agreed to oppose a proposal to consolidate TRS with two other state pension plans because the merger would threaten their influence at TRS.

Cellini and Levine also agreed to seek help from Rezko and another person — listed as “Co-Conspirator A” in the indictment, but apparently Blagojevich fundraiser Christopher Kelly — to defeat the plan. All four people allegedly agreed that Cellini and Levine would use their influence to hire investment firms that made contributions to “Public Official A.”

Kickback refused

Between February and April 2004, the indictment states, Cellini, Levine, Rezko and Co-Conspirator A tried to prevent Capri Capital from receiving the planned $220 million allocation from TRS because Rosenberg had not donated to Public Official A.

Cellini and Levine decided Cellini would tell Rosenberg to talk to Levine to arrange to make the contributions, the charges say.

“Cellini allegedly reported back to Levine that Rosenberg would not be extorted and threatened to expose their plan to law enforcement,” the news release states.

As a result, the four alleged conspirators agreed it was too risky to keep demanding money from Rosenberg or to block the $220 million allocation. They agreed the money would be provided to the firm to invest, but Capri and Rosenberg would not receive any further state business, according to the documents.

The indictment also says TRS executive director Jon Bauman — identified in the indictment as “TRS Staffer A” — was aware of secret talks involving Cellini, Rezko and others about transferring Bauman to another job in state government “to ensure that TRS Staffer A would not cooperate with the government.”

Remove prosecutor?

In the summer or fall of 2004, the news release states, Cellini, Rezko and others even discussed the possibility of removing Fitzgerald from his prosecutor’s post in the Northern District of Illinois in an effort to stop the investigation.

Webb, however, said that in the Rezko trial, Rosenberg testified that “Bill Cellini never asked him for any money and that Rosenberg never paid any money to Cellini or anyone else.”

“In fact, Rosenberg admitted that he was the one who reached out to Cellini, a longtime friend, for help with a matter Capri Capital, Rosenberg’s company, had pending before the Teachers’ Retirement System,” Webb said. “Rosenberg admitted that Cellini did not reach out to him. And, in fact, Cellini did help Rosenberg as Rosenberg had requested.”

Cellini was “completely unaware” of past schemes in which Levine tried to extort money from Rosenberg, Webb said.

“When the Rezko indictment was returned, the government did not indict Bill Cellini on these allegations due to lack of evidence,” Webb said. “The evidence the government subsequently presented at the Rezko trial demonstrated that Bill Cellini never asked Rosenberg for any money, for any political contribution, or for anything else. Further, the evidence demonstrated that Cellini never received any money or anything else from Rosenberg or from anyone.

“The evidence is the same today as it was then, and it is disappointing that this indictment has now been brought with no additional evidence.”

Left local GOP post

Cellini recently stepped down as treasurer of the Sangamon County Republican Party after nearly three decades, officially because he expected to be out of town a lot. Party officials later said he would stay active in local affairs, and that despite the low-profile party position, he would remain a strong influence in such matters as vetting candidates for political offices.

“He obviously is going to continue to be a person who party activists and leaders will always talk to, because he has a great talent for the business,” Bruce Stratton, long-time secretary of the county GOP, said last week.

Bernard Schoenburg can be reached at (217) 788-1540 or bernard.schoenburg@sj-r.com.

The prosecutor

Patrick J. Fitzgerald, 44, has headed several high-profile prosecutions since becoming U.S. attorney for the Northern District of Illinois, based in Chicago, since 2001. Among them are:

--The Operation Safe Road prosecution of former Gov. George Ryan and others for political bribery and gift-giving. Ryan is serving a 6 1/2-year federal prison sentence.

--Indictments of top aides to Chicago Mayor Richard Daley for mail fraud and illegal city hall hiring practices, as well as an investigation of the city of Chicago’s hired truck program that has netted the convictions of two dozen defendants. Former Chicago City Clerk James Laski also pleaded guilty in 2006 to taking bribes for steering business to two trucking companies.

--Acting as special counsel, Fitzgerald convicted Lewis “Scooter” Libby, Vice President Dick Cheney’s chief of staff, for perjury and obstruction of justice in connection with the illegal public identification of Valerie Plame Wilson as a covert Central Intelligence Agency officer. Libby never went to prison, though, as President Bush commuted his sentence.

Fitzgerald previously was an assistant U.S. attorney in New York. There, he participated in or supervised prosecutions growing out of the 1998 bombings of U.S. embassies in Kenya and Tanzania, the 1993 bombing of the World Trade Center, a conspiracy to detonate bombs on U.S. airliners in 1994 and 1995, and the trial of organized crime figure John Gambino.

Fitzgerald is a native of Brooklyn, N.Y., and a graduate of Amherst College and Harvard Law School.

The Rezko connection

Antoin “Tony” Rezko was indicted along with businessman Stuart Levine in 2006 on charges they attempted to extort millions of dollars from businesses seeking to do business with the Illinois Teachers’ Retirement System and the Illinois Health Facilities Planning Board.

Levine pleaded guilty and agreed to testify against Rezko and others.

After a trial last spring, Rezko was found guilty of 16 of 24 charges. He has been held since then in the Metropolitan Correction Center in Chicago.

Rezko’s sentencing had been scheduled for this past Tuesday, but a judge earlier this month postponed the sentencing hearing - apparently because Rezko was seeking a deal in which he would cooperate with prosecutors.

According to testimony at Rezko’s trial, Bill Cellini of Springfield played a role in an attempt to extort either a kickback or campaign donation from a businessman and movie producer who wanted to invest TRS funds. However, Rezko was acquitted of most of the charges that involved Cellini’s alleged activities.

Cellini is the 13th person charged in the ongoing Operation Board Games investigation.

Major players in Illinois “Operation Board Games” scandal

--Gov. Rod Blagojevich: Apparently “Public Official A” in documents filed by prosecutors in the cases of both Tony Rezko and Bill Cellini. Documents suggest that, in addition to lining their own pockets, some alleged conspirators sought contributions to Blagojevich’s campaign fund.

--Antoin “Tony” Rezko: Developer and fundraiser for Blagojevich. Convicted of trying to engineer a multimillion-dollar kickback scheme after gaining control of the state’s Teachers’ Retirement System and Health Facilities Planning boards.

--Stuart Levine: Former member of the TRS and health facilities boards. Pleaded guilty to scheming to get kickbacks and other payments from companies seeking to do business with those boards.

--Christopher Kelly: Head of Blagojevich’s fundraising operation. He apparently is the person identified by prosecutors as “Co-Conspirator A” in the Cellini indictment and “Individual B” in the indictment of Rezko.

--Jon Bauman: Executive director of the Teachers’ Retirement System, identified as “TRS Staffer A” in Cellini indictment. Prosecutors have said Bauman pressured TRS staff to conduct favorable reviews of investment firms chosen by Levine and others to receive TRS money. Bauman denies it and has not been charged with any wrongdoing.

--Robert Kjellander: Springfield resident who runs a consulting firm. Worked with Levine and other board members to get TRS investment business for the Carlyle Group, which was represented by Kjellander and Cellini. Kjellander got a hefty fee after Carlyle landed the work. Has not been charged with wrongdoing.

--Tom Rosenberg: Movie producer and principal in a firm that wanted to participate in TRS investments. However, Rosenberg refused alleged kickback demand in return. As a result, prosecutors say, Rezko, Levine and others ultimately gave in and OK’d an allocation of TRS funds to Rosenberg’s firm.

--Joseph Cari: Attorney and fundraiser for the Democratic National Committee. Pleaded guilty to attempted extortion.

About the Teachers' Retirement System

Created in 1939, the Illinois Teachers’ Retirement System administers pension benefits for public school educators outside the city of Chicago. The system employs about 170 people.
It counts more than 357,000 members, including nearly 161,000 active members, more than 91,000 retirees and beneficiaries and about 105,000 inactive members. The average annuity is about $41,500 a year.

As of Sept. 30, the system had $34.1 billion in assets. Funding for TRS comes from the state, teacher contributions and from investments. Teachers contribute 9.4 percent of their salaries.
TRS operations are overseen by an 11-member board. That includes the state superintendent of education, four members appointed by the governor, four selected by active teachers and two selected by retired teachers.